Thursday, September 21, 2006
Steamboat Ski area sale could fetch $220m plus
A front page article in the Denver Post reports that Steamboat could get $220-275M based on an 8-10X multiple of earnings before interest and taxes. If a ski area is on your Christmas list, Steamboat could be perfect for you. It will be very interesting to see this unfold. The prospect of a capable buyer that will invest in Steamboat is very excited and would likely bode well for the real estate market in Steamboat Springs.
Quote from the Denver Post article:
"The documents, which were distributed to potential buyers, led one industry analyst to value Steamboat at $220 million to $275 million, although the asking price has not been disclosed...Park City, Utah-based American Skiing Co. put the north-central Colorado resort on the block in July...Steamboat drew 1.047 million skiers last winter and generated $74.2 million in revenue in fiscal 2006, up 12.3 percent from 2005...Analyst Will Marks of JMP Securities in San Francisco based his value estimate on a multiplier of 8 to 10 times Steamboat's earnings before interest, taxes, depreciation and amortization, or EBITDA, a measure of cash flow. According to the document prepared by Bear Stearns & Co., Steamboat's EBITDA was $27.5 million for fiscal 2006. "Based on today's market conditions and valuations for various real estate and related assets, I think that's a fair multiple," Marks said. "It's impressive that (Steamboat's EBITDA) is that high."...The last major U.S. ski resort to sell was Mammoth Mountain Ski Area in California, which was purchased last fall by Starwood Capital Group for $365 million, or approximately 11 times its EBITDA... Included in the sale are 245 acres of property that Steamboat owns, licenses or leases, along with an additional 3,498 acres of mountain terrain that falls under a long-term special use permit from the U.S. Forest Service...Steamboat has identified six parcels of its base area land that are available."
See the full article here in the Denver Post.